Geopolitics, as demonstrated by the latest report from the International Chamber of Shipping (ICS), has become the main risk for operators and shipowners. This assessment was sadly confirmed by the escalation of the war between Israel and Iran last week, in a conflict that once again challenges the security and stability of global supply chains. The importance of this conflict for the maritime sector lies in the possibility of the de facto closure of the Strait of Hormuz, a key navigation point to and from the Persian Gulf not only for tankers transporting crude oil, but also for container ships calling at key ports such as Jebel Ali (pictured) in the US. Its possible blockage, as we will explain later, could have repercussions throughout the rest of Asia.

In terms of navigation safety, the United Kingdom Maritime Trade Operations (UKMTO) reports that there is currently no evidence that commercial shipping is being targeted by Iran. However, it warns that the rapid escalation of tensions increases the risk of the Houthis expanding their objectives in the region. It should also not be forgotten that Iran has had no qualms about interfering with international shipping, as demonstrated by the illegal seizure of the 14.000 TEU container ship MSC Aries in 2024, a vessel that currently remains in its hands.

Another domino effect 

The conflict could also disrupt operations at Israel's Mediterranean port of Haifa due to a shortage of personnel who will have to take shelter as Iranian attacks continue. But the suspension of services to Jebel Ali could have a far bigger impact. hub key US port in the Persian Gulf. The closure of the route would cause a redirection of services, resulting in a sharp increase in container traffic in the hubs transshipment outside the Gulf, with a high risk of amplifying congestion in key Asian ports and generating a new domino effect that will impact the rest of the world.

On the other hand, the closure of this route could add impetus to the upward push in containerized shipping rates due to rising oil prices. In fact, maritime industry analyst, lars jensen, indicated that, as of Friday, June 13, according to the WTO, crude oil prices rose more than 9% following the attack, while crude oil futures rose 13%.

Unlikely return to the Red Sea

However, with the intensification of the conflict, the shipping lines will find some relief. According to xenetaThe escalation also reduces the likelihood of a massive return of container ships to the Red Sea, a situation that continues to have a significant impact on container shipping rates 18 months after the Houthi rebels in Yemen began their attacks. This factor, coupled with congestion at several key ports, will continue to support capacity demand and help absorb the constant flow of new vessel deliveries, thus boosting global freight rates.

Rates begin to fall on the Transpacific 

Meanwhile, as stated Jensen, the rate spike is beginning to slow as shipping lines are able to reintroduce capacity on the transpacific trade. Thus, after a staggering 66% surge since a 90-day truce in mutual tariffs between China and the U.S. was agreed upon in early May, the Shanghai Containerized Cargo Index (SCFI) on the Shanghai-U.S. West Coast (USWC) trade fell sharply by US$1.486/FFE. (Forty-Foot Equivalent) to US$4.120/FFE. However, rates to the US East Coast (USEC) only decreased by US$194/FFE.

According to the SCFI, spot rates on the Shanghai-West Coast South America (WCSA) route also experienced a steep drop from US$869/FFE to a (still high) level of US$3.714/FFE. However, on the East Coast (ECSA) route, they increased by another US$769/FFE to US$4.724/TEU. Thus, rates to ECSA have increased by US$3.331/FFE in the last six weeks, equivalent to an increase of 6%.